Winter 2010
What strategies should retailers implement to host a successful sale?

A good sale not only moves stale inventory, it injects much-needed cash flow into your business.

Lauren Heamon of Fox Premier Sales

Lauren Heamon of Fox Premier Sales

Sale! Clearance! BOGO! Half off!

These words are magical to the customer and should be to the retailer as well. Sales create excitement and opportunity. Most important, sales generate cash flow and movement of slow inventory, allowing new products to be purchased for stores. Because of the current economic climate, seasonal products and some non-essential items may require an additional push.

The first step toward a successful clearance event is to have a plan. Evaluate your holiday product three weeks, or approximately 30 days, after you put it on the floor. What needs to happen to get some extra sales from the collection?

Consider an email blast or direct mail piece that offers a percentage off, probably at least 20 percent. As the holidays near, consider offering greater percentages off until merchandise clears shortly after the holidays.

The second step toward a successful clearance event is to not store seasonal goods—this is equivalent to putting your money on the shelf for a year.

Pricing of merchandise—including up front—is important. Did you mark it up enough? What did you really buy the item for? Did you include freight? Consider building in an additional percentage up front to try and offset the markdowns later. This will allow you to make your investment back, even if you run it on clearance.

Non-seasonal sales are a little trickier, as you don’t want to train customers to wait for monthly sales. I would suggest identifying slow sellers on a quarterly basis, moving them out as necessary. Consider a sidewalk sale, in-store events, anniversary sales, VIP sales, etc. Or create a permanent clearance corner keep it small and add products as you see fit to move them out.

Finally keep your inventory lean, your cash flow positive, your merchandise fresh, and your displays and merchandising new and inviting. And don’t get too emotionally attached to products that just don’t sell. Another 60-90 days usually makes no difference. Buy right, buy often, and keep your inventory fresh and new. When something does not move, move it out!

Kelli Kottenstette, National Sales Manager of Alexa’s Angels

Kelli Kottenstette, National Sales Manager of Alexa’s Angels

As a retailer, the last thing you want is to have your gift store become one of those where discounted goods and clearance events are the status quo. A great way to avoid this is by strategically planning clearance events. These are not the twice-a-year markdown sales when you place all the season’s leftover items on a table with a “Reduced” sign. Instead you need a specially orchestrated promotion that can have a significant impact on product demand and sales. By planning several of these exciting events each year, you’re giving customers a reason to return to the store on a regular basis.

Focus on your strategy before rushing into a price-cutting extravaganza, which could hurt your bottom line in the long run. Also, carefully consider how low you can reasonably go on your pricing. You want to go low enough to draw customers, but still make money for your business.

Now you need to determine the best way to make the offer to your customers. Keep in mind not only what customers buy at your store, but also how and why they buy it. This will help you create your promotion.

Some promotional possibilities are:

  • Buy one, get one free.
  • Discount drawn from a bowl.
  • Coupon in the mail.
  • Prices marked as “Sale.”
  • 50% discount on all clearance items.
  • Mystery grab bags of holiday merchandise.
  • Extra discounts for frequent buyers.

Also, set a time limit for the sale and create a sense of urgency—”buy now” signage helps. This will help you avoid a long, lingering sale section in your store. Be sure your website has a clearance section that is easy to access and has all sale items on a page.

To have a successful sale, you need to drive traffic to your store. Here are some ideas:

  • Email promotion to existing customer base.
  • Team up with other nearby retailers to create a “Gala Event.”
  • Utilize your social media channels to get the message out.
  • Print and radio advertising.
  • Outdoor signage.
  • Direct mailings.

In-store sale posters will also help draw customers. You can easily create your own through template-based companies such as

You can also create matching mailers, invitations and coupons on this website.

Last but not least, don’t forget to treat your discount buyers just as wonderfully as you treat your regular customers. Smile and have fun ringing up all those sales.

Gail Markert of Markert Group Consulting

Gail Markert of Markert Group Consulting

Name it. Sale events present a marketing opportunity for your store beyond the sale itself. By naming and promoting your event to attract attention, you have the potential to reach both current and new customers for your store. The publicity will advance your brand and name recognition in your market. Use your events both as a vehicle to move inventory and expand your brand awareness. While “winter clearance” is functional, simple and descriptive, something more adventurous might also be an option depending on your brand identity. Just be careful not to make it confusing, customers need to know the nature of the event.

Develop a pricing strategy. Will your offerings have enough item or brand “identity” to be displayed as a collection or will it be mostly broken assortments that have evolved into odds and ends? Cohesive collections can often still be displayed attractively and may be able to be priced at less of a markdown while odds and ends require a deeper cut, 50% off, at least.

Promote it. Develop a written marketing strategy and budget for the event well in advance of the date. Determine the steps and timeline for your promotional activities. Will you rely on print or broadcast advertising, an internet blast, a postcard mailing to your store list, in-store signage, bag stuffers? Each requires a different lead-time. Make sure that all promotional pieces are consistent with your store brand in design, feel, and use of your store colors and logo.

Have some fun. People linger longer in a fun environment. Play some music, put out a regularly replenished plate of cookies, offer bottles of cold water, have drawings, small free gifts or impromptu promotions. Most important, structure the event so you and your staff are having fun and you project that attitude and atmosphere to customers. Have a little contest with a prize for whoever sells the most, or the last, of some item that has been hanging around all season. Provide lunch and snacks in the break room. Let the attitude be, “It’s going to be a long but satisfying day” and lead by example.

Benno Duenkelsbuehler, Managing Principal of (re)ALIGN for Results, LLC

Benno Duenkelsbuehler, Managing Principal of (re)ALIGN for Results, LLC

Two suggestions: Planning ‘what and how’ is crucial – and will be most effective if your store is aligned like a well-oiled machine. Planning and preparing product lists, discounts, signage, and traffic drivers is crucial to attracting visitors into your clearance event, and turning them into happy paying customers.

And for that well-oiled machine—check for alignment among these three elements: your leadership to a big idea, clarity and commitment to a market niche, and cultural alignment around customer touch points (yes, including a clearance sale, and all the little moments of truth that can validate or destroy your brand and your store).

Ed Butler of The Butler Group

Ed Butler of The Butler Group

Gift shop owners would do well to apply the principles that chain stores implement. For 27 years I managed department stores and found these elements to bring success:  

1. Plan a storewide event. You need traffic to move clearance. Promoting clearance alone is not as appealing as a storewide sale. Consider buying items to give away as a “gift-with-purchase” or free to the first 200 customers. Include lines that sell well and be prepared to buy more to stay in stock. Most vendors will ship quickly in December.  

2. Timing is critical. A winter clearance event needs to be in season when people are shopping, in December. Earlier is better than later. Review rates of sales in November and promote to clear in December while you have peak traffic.  

3. Markdowns must be significant and well signed. Depending upon the current rates of sales the initial price reductions will vary: 25% off if the product is selling well but you will have inventory after December. If the product is slow, take 40% off at the first markdown. Review rates of sales after one week (in December) and take a second markdown to 50% off or more.  Waiting until January when there is less traffic will cost more and take longer to liquidate.    

4. Make sure you have adequate quantities and assortments of new merchandise coming into your store in December so that your store looks full and fresh on the day after Christmas which is Saturday this year, a great day for shopping.  Nothing looks worse and hurts business more than a store with only left over remnants of winter clearance. This fresh, new merchandise arriving in December to sell in January, February and March will help build your store traffic. Those shoppers will also buy your winter clearance. 

Rosanne Brown of Venice Stationers

Rosanne Brown of Venice Stationers
Venice, FL

We have a “sale” area year round, except for the period between Halloween and Christmas (we just don’t have the space).  Our philosophy is simple: If it goes to the sale area we want it out of the store, so we start with a 50% off discount. If we find its not selling at 50% off, we will go lower, but we never put anything out less than half off to start. We don’t make the “sale” area too attractive because customers seem to like to do a little hunting for the bargains. If a product has a flaw we may sell it “as is”, but generally our sale product is clean (no dust) and in original packaging.  Sale items are also a final sale, no returns, exchanges or credits.  

Our biggest clearance happens after Christmas and customers will line up on Dec. 26th.  We try not to hold over any product, if it didn’t sell this year chances are it won’t sell next year.  We might hold over items that sold well but perhaps I was a little too optimistic in my ordering.  Because we are in Florida we can hold our Christmas sale longer since the “snowbirds” enjoy a good buy too.  We will mix non-seasonal product in as well.   

Our point of sale system can flag those products that need to go even if our hearts believe it is still viable.  It eliminates the emotional attachment we my hold to our merchandise. If it’s been in the store too long, it goes at whatever price. The last resort is Goodwill or the dumpster!

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